Cumulus Media Inc (NASDAQ:CMLS)

Cumulus Media Inc (NASDAQ:CMLS) Getting Dropped from Analyst’s Play Lists

Cumulus Media Inc (NASDAQ:CMLS)

Various financial media outlets have reported that shares of Cumulus Media Inc (NASDAQ:CMLS) were downgraded on Tuesday by Zack’s Investment Research. But it seems that few paid have attention to the news. CMLS shares closed Friday at $0.40; they closed Tuesday at $0.47; and they are trading around $0.57 at 2:40 PM EST. To put a pencil to paper, that gives CMLS a 42.5% return since Friday’s close and over a 20% gain since yesterday’s close. The gains come alongside heavy volumes. Today over 1.4 million shares have been exchanged, or about 1 million more than their 30-day, daily average volume.

To be fair, the downgrade may be accurate however a little late. Or maybe a lot late. At the beginning of 2013 Cumulus Media Inc (NASDAQ:CMLS) was trading under $20 but would go on to hit above $60 by the end of the year. Then the wheels came off. By the end of 2015 investors could have picked up CMLS shares for under $1.50. CMLS shares never fully recovered and now are trading closer to their 52-week low of $0.22 than they are to their 52-week high of $3.60.

Cumulus Media Inc (NASDAQ:CMLS) has a novel business model. It operates radio stations in the mid-markets and currently reaches over 240 million people every week. Cumulus’ 447 owned and operated radio stations broadcast in 90 media markets and they have over 7,500 more that are affiliated with the Cumulus/Westwood brand. Importantly, Cumulus Media Inc (NASDAQ:CMLS) is the largest country music provider in the nation through its NASH brand.

Unlike many nano-cap firms, Cumulus Media Inc (NASDAQ:CMLS) share drop was not due to shareholder dilution. In 2014 there were 28.27 million shares outstanding and by 2016 that number increased just to 29.27 million. Sales have also been relatively consistent as in each of the past five years sales figures have come in between $1.00 million and $1.26 million. What has hurt has been the earnings losses. Although a small EPS profit of $0.40 was posted in 2014, in 2015 the EPS loss was (-$18.73) and (-$17.45) in 2016. So far 2017 does not look like any help will be coming as, for Q1 2017, Cumulus Media Inc (NASDAQ:CMLS) reported net revenue of $264.0 million, down 1.7% from the three months ended March 31, 2016, net loss of $7.4 million and Adjusted EBITDA of $38.7 million, down 7.6% from the three months ended March 31, 2016. No doubt that until earnings get turned around, no analysts will be lending CMLS their stamp of approval. I think in the radio business they call this a falling star.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD) Rallies On Q1 Profit Even As Sales Decline

Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD) was a big market mover after posting its first profit since 2015, helping fuel optimism about the impact of an ongoing turnaround effort. For the first three months of the year, the retailer says it generated a net income of $244 million compared to a net loss of $471 million a year earlier.

Cost Cuts Impact

Net profit in the first quarter comes on the heels of a cost-cutting push that has seen Sears Holdings Corp (NASDAQ:SHLD) spin off some assets as it sought to raise cash to stay afloat. However, the fact that the company’s core Kmart department stores continue to struggle, remains a point of concern for investors.

“During the first quarter, we took decisive actions to reduce our cost base and drive operational efficiencies which allowed us to make significant progress on our restructuring program. We also remained focused on increasing our financial flexibility and creating value from our asset base to ensure we continue to meet our financial obligations and fund our transformation,” said chief executive officer, Rob Riecker.

Sales & Cash Decline

Revenues in the first quarter totaled $4.3 billion compared to revenues of $5.4 billion reported a year earlier. The company has attributed the decline to fewer Kmart and Sears Full-line stores in operation compared to last year.

Comparable store sales declined by 11.2%, Sears Holdings Corp (NASDAQ:SHLD) having experienced a decline in sales in its grocery, household, pharmacy, apparel, and home categories. The same led to a decline in gross margin that dropped by $247 million compared to last year.

Selling and administrative expenses decreased $236 million in the quarter compared to last year – a drop that the company attributes to improves operational efficiency and reduced costs.

Sears Holdings Corp (NASDAQ:SHLD) market rally came as investors took note of Lambert’s turnaround plan that seems to paying off. However, with a shrinking store base and less advertising the company remains in a precarious position as it tries to return to its glory years.

The company’s cash balance dropping to $264 million from $286 million as of the end of 2016 is also a point of concern. While the company still boasts $3.7 billion in total liquidity, some investors are already starting to question the company’s financial health given the rate at which it is burning cash.

Sears Holdings Corp (NASDAQ:SHLD) stock was up by 13.52% in Thursday’s trading session, ending the day at $8.48 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Applied Optoelectronics Inc. (NASDAQ:AAOI)

Applied Optoelectronics Inc. (NASDAQ:AAOI) Trading Higher On Rise of Data Centers

Applied Optoelectronics Inc. (NASDAQ:AAOI)

Applied Optoelectronics Inc. (NASDAQ:AAOI) impressive run in the market shows no signs of slowing down given the upgrade cycle in the data center market. The company’s core business is poised to receive a major boost as more tech companies continue to upgrade to superfast communications for cloud-based services.

Demand for Fiber-Optic Equipment

The fiber-optic device maker boasts of the likes of Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc. (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) as its biggest customers. Given that these companies are aggressively ramping up investments in the cloud means the company remains well positioned to register strong growth going forward.

Expectations of increased demand for fiber-optic components from China later in the year also continues to bolster analyst expectations for Applied Optoelectronics Inc. (NASDAQ:AAOI). Last year telecommunications companies in the country aggressively upgraded to 4G networks. However, the market experienced a slowdown early this year with recovery only starting to kick in.

Earnings Beat Impact

Applied Electronic’s first quarter earnings beat estimates which provided a glimpse of what is in store as the race for superfast data centers heats up.

“We continue to believe AAOI remains in prime position to see impressive growth in 2017 as demand for 100 gigabit-per-second optics accelerates. Growth in the data center business was once again driven by their largest customers, Amazon and Facebook (19% of sales). Microsoft has historically been a 10% customer, but was below that threshold this quarter”, “said Piper Jaffray analyst Troy Jensen.

Shares of Applied Optoelectronics Inc. (NASDAQ:AAOI) are currently trading at all-time highs, investor’s sentiments having been bolstered by a stellar showing in the first quarter. For the first three months of the year, the company says its revenue grew by 91% to $96.2 million from $50.4 million as of Q1 2016.

The company reported a net income of $19.8 million in the period, compared to a net loss of (-$1.3) million for the same period last year. Gross margin in the quarter soared to highs of 43.1% from 28.3% as of Q1 2016.

For the second quarter, Applied Optoelectronics Inc. (NASDAQ:AAOI) expects its revenue to be in the range of between $106 million and $112 million in line with the current growth momentum. Net income should be between $22.2 million and $24.3 million representing earnings per share of between $1.09 and $1.19 a share.

Applied Optoelectronics stock was down by 2.93% in Tuesday’s trading session ending the day at $69.15 a share.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Sorl Auto Parts, Inc. (NASDAQ:SORL)

Market Continues to Push Up Sorl Auto Parts, Inc. (NASDAQ:SORL)

Sorl Auto Parts, Inc. (NASDAQ:SORL)

Sorl Auto Parts, Inc. (NASDAQ:SORL) has beaten street earnings estimates four quarters in a row. It has not been above $6 for the past 5+ years but in the last few days SORL shares have been on a run and today are trading around $9.25 on huge volumes – over 25 times their 30-day, daily average. As might be expected, SORL’s Relative Strength Index (RSI) is 88+ – near nosebleed levels. Traders generally believe that a stock’s RSI is on “overbought” territory once it breeches 70.

Still, optimism is warranted. YTD shares of Sorl Auto Parts, Inc. (NASDAQ:SORL) are up over 130%, up 71% for the month, and up 57% for the week. Prior to today their 52-week high was $7.80 which was just $0.20 shy of the street’s target price of $8.00. That target price was shattered by this morning’s market action. SORL shares closed at $7.13 on Friday and opened at $7.47 before hitting and inter-day high of $9.50 as of 12:00 PM EST. Currently shares of Sorl Auto Parts, Inc. (NASDAQ:SORL) are trading over 165% above their 200-day simple moving average.

Although having a market-cap of around $135 million, the Chinese auto parts manufacturer is not covered by many analysts. That may change given the company’s past four quarterly earnings reports. Sorl Auto Parts, Inc. (NASDAQ:SORL) reported Q1 2017 earnings last week. Net sales improved by 37.4% to $74.9 million. Q1 2016’s figure was just $53.8 million. Gross profit increased by 42% over Q1 2016, and their margins increased from 26.8% to 27.8%. The real blockbuster number came in net income attributable to shareholders. In Q1 2016 that figure was $0.02 – for Q1 2017 it was $0.36. Impressive by any benchmark.

Sorl Auto Parts, Inc. (NASDAQ:SORL) management has increased annual guidance of net sales to approximately $315 million and net income of around $27.5 million.

Ms. Jinrui Yu, SORL’s Chief Operating Officer, stated “We continue to roll out new advanced braking products which immediately gain traction in the market due to their enhanced performance, added features and improved reliability. We have implemented stricter cost controls, purchased more advanced machinery and moved into new facilities to improve our efficiency and increase our profitability,”.

Of note is the lack of dilution of SORL shares. In 2012, the company reported 19.31 million outstanding shares – the same number they reported in 2016. It would not be unusual for a company to issue more shares over the years to raise funds for expansion related activities. However, to the credit of Sorl Auto Parts, Inc. (NASDAQ:SORL) they have managed increased sales and profits with any such need to dilute shareholder equity.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Marijuana Company Of America Inc (OTCMKTS:MCOA) Finalizes Joint Venture Agreement With Bougainville Ventures

Marijuana Company Of America Inc (OTCMKTS:MCOA)

Marijuana Company Of America Inc (OTCMKTS:MCOA) has announced finalizing a joint venture agreement with Bougainville Ventures, Inc. (“BV”) in Washington State. Marijuana Company of America Inc specializes in marketing and distribution of innovative cannabis and hemp products.

Following the agreement, Marijuana Company Of America Inc (OTCMKTS:MCOA) has rolled out $1 million in cash investment in the newly formed company. Bougainville Ventures, Inc will be tasked with contributing expertise to the ongoing construction of as well as management of the 30,000-sq. ft. greenhouse project which is expected to house a Tier-3 production and processing I-502 plant. Bougainville Ventures, Inc boasts of high experience spanning for decades plus a proven track record of quality and consistency. As part of the agreement, the two companies will share equity and profits from the new venture equally.

As landlords, MCOA and Bougainville Ventures will offer the I-502 tenant with a highly innovate state-of-the-art facility which creates a conducive environment for cultivation which they can move in and start operation immediately. This will enable the tenants to focus on producing high quality products without the worry of facility maintainenance. Marijuana Company of America President and CEO Donald Steinberg said the project will be helpful in expanding the company’s business in Washington State market. He added that the company is working completing the PCAOB audit which has been significant pillars in increasing the company’s shareholding.

The implementation of the agreement is the last step in making the Letter of Intent formal and fully operational. The main purpose behind the formation of the joint venture is to oversee the construction and management of greenhouses as well as commercial leasing to I-502 licensed growers in Washington State. The facility will be leased to cultivators in Washington State only.

Bougainville Venture Inc specializes in converting irrigated farmland which was traditionally used for growing marginally high profit feed crops, into new farmland states with state-of-the-art greenhouses used for cultivation of luxury crops with the focus on high-yielding and high-density crops. The company is engaged in the provision of agricultural services that focuses on offering cultivators with highly innovated computerized greenhouses and processing plants. Marijuana Company Of America Inc (OTCMKTS:MCOA) offers fully built and installed turnkey solutions to growers in addition to providing them with growing support and infrastructure.

Marijuana Company Of America Inc (OTCMKTS:MCOA) stock lost 4.41% to close at $0.0325 on a volume of 10.45 million shares.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

 

Cyren Ltd (NASDAQ:CYRN) Internet Security Products Successfully Block WannaCry Attacks

Cyren Ltd (NASDAQ:CYRN)

Cyren Ltd (NASDAQ:CYRN) has once again reaffirmed its credentials as a leading internet security provider, its products having successfully detected and blocked the havoc surrounding the WannaCry malware. The company says users of its products remain protected from all variants of the malware.

Today, Cyren Ltd (NASDAQ:CYRN) reported a Q1 2017 $2.5 million loss – or $0.06 per share. Revenues were posted at $8 million for the internet security services provider. The company’s shares closed at $2.30 yesterday and are now trading around $2.17 – almost a 5% drop. A year ago, they were trading at $1.74.

Cyren Blocks WannaCry Attacks

The internet security provider says its cloud has detected over 300 variants of the WannaCry attack to date. The firm has also reaffirmed that its cloud continues to identify and block any malicious IP addresses and C&C servers which are being used to initiate the WannaCry attack.

“Cyren customers are protected from all WannaCry variants and were protected from the initial malware outbreak by Cyren’s SaaS email security gateway, web security gateway, and cloud sandboxing services. Cyren Threat Intelligence Services partners are protected from all WannaCry variants and were protected from the initial malware outbreak […],” said the company in a press release.

The internet security provider recently unveiled Cyren Cloud Security 4.0 platform – billed as the industry’s first security solution that can deliver web email and DNS-based security from a single SaaS platform. The platform is designed to simplify and integrate the management of siloed point security solutions. It also eliminates complexity and costs while delivering better protection from sophisticated cross-vector threats.

Board Appointment

Separately, Cyren Ltd (NASDAQ:CYRN) has confirmed that John Becker has joined the company’s board of directors as an outside director. Becker joins the company with 30 years of security and technology experience. He has previously served in a number of company’s board of directors in addition to being the chief executive officer of Source fire, Approva Corporation, and AXENT Technologies.

Private Placement

Recently, Cyren Ltd (NASDAQ:CYRN) confirmed it has entered into subscription agreements with a number of investors for the purchase of $6.3 million principal amount of convertible notes. The unsecured notes carry a 5% interest payable semiannually in 50% cash and 50% in ordinary shares.

The notes have a two-year term and set to mature in September of 2019. Cyren plans to use net proceeds from the offering for general corporate purposes.

Shares of Cyren Ltd (NASDAQ:CYRN) are up by 15% in Monday trading session ending the day at highs of $2.30 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Camtek LTD. (NASDAQ:CAMT)

Massive Volatilities and Some Unwanted Attention for ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL(OTCMKTS:ZPAS)

ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL(OTCMKTS:ZPAS)

Shares of ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL(OTCMKTS:ZPAS) are experiencing exceptionally high volatility. Today’s trading has seen ZPAS shares hit a high of $3.47 and a low of $2.05. Yesterday the company issued a press release that raised a lot of eyebrows. The OTC Markets apparently approached Zoompass management on Monday with a promotional newsletter touting Zoompass and advocating that investors purchase it shares. Zoompass’ Tuesday press release left no doubt that management was distancing themselves from the effort:

The Company is unaware of the full nature and content of the promotional newsletter and any related promotional activity, the responsible parties and the extent of the email newsletters’ dissemination. The Company is not aware of the promotional materials’ author or its affiliated entities or persons, other than the identifying information disclosed in the newsletter. The Company’s recent press releases have reported on and provided disclosure of legitimate and ongoing corporate activity only, and are not part of any promotional activities or campaign.”

ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) is a developer of financial technology that assists clients in digitizing their payment, lending, and compensation transactions. Based in Toronto, Canada Zoompass changed its name from UVIC in January of 2017 and the company’s ticker was changed from UVVC to ZPAS. In February of this year, FINRA approved a 3.5 forward split for shareholders of record on September 7, 2016 – a move also approved by shareholders on that same date.

ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) leverages their banking partners Visa and MasterCard and has a card and mobile payment solution services platform they market for use as employee incentives, compensation, customer rewards, and promotions. Zoompass also offers a customized credit card program through their partnership with Home Trust bank. ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) also offers international and domestic fund transfers through a Zoompass’ Mobile Money app. Lastly, Zoompass offers professional services to companies who want to outsource the compliant-heavy IT requirements associated with financial technology operations.

ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) is led by Rob Lee and Steve Roberts. Rob Lee is a Director and CEO who previously worked for publicly listed Versatech Group Inc. Steve Roberts is a Director and President who has over 30 years in the Canadian telecommunications industry. Before joining Zoompass, Roberts lead a team that was developing Ingram Micro’s Canadian mobility market share and partnerships.

ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) aggressively pursues partnerships and as of early March, 2017, Zoompass had agreements with Synnex Canada Ltd., Sky Devices LLC, U-Vend Group, and Starlink Group LLC – amongst many others.

As with many other companies of this level of market capitalization, ZOOMPASS HLDGS INC COM USD0.0001 (POST FWD SPL (OTCMKTS:ZPAS) has no listed profits and is currently operating at a loss.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy. 

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance

Uniquely Positioned MassRoots Inc (OTCMKTS:MSRT)

MassRoots Inc (OTCMKTS:MSRT)

MassRoots Inc (OTCMKTS:MSRT) is a novel approach to investing in the growing cannabis industry. Created by Isaac Dietrich and Tyler Knight, MassRoots is a social media platform used by recreational consumers of cannabis. Users access the platform through an App and share experiences and ratings of different strains, and forms, of cannabis and cannabis oriented products such as food items or sleep aids.

After being turned down by Silicon Valley investment firms, the pair turned to self-financing the project and acquiring users through word of mouth – mostly on other social media platforms. In early 2014 MassRoots Inc (OTCMKTS:MSRT) launched on the back of a $150,000 seed round raised from investors who were willing to believe in the vision and belief that marijuana was becoming more mainstream and losing its patina of illegality. Soon they had over 100,000 users. By September, MassRoots Inc (OTCMKTS:MSRT) was publicly listed on the OTCQB and gaining 20,000 – 30,000 users per month.

MassRoots popularity even took on tech giant Apple. In late 2014, Apple’s App store was declining to continue to offer the free MassRoots App and went so far as to publish a rule that all cannabis social networks were banned from their App platform. What followed may have made history. An email campaign was started by MassRoots’ users and fans. A letter was authored and signed by dozens of business leaders in the cannabis industry. In less than 60 days, Apple reversed their policy and allowed the MassRoots App into their online store. However, as MassRoots Inc (OTCMKTS:MSRT) details in their latest annual report, other platforms have ceased offering their App or suspended their social media account. As the company details in the report – these disruptions may occur in the future which might impact their business goals.

Financials for MassRoots Inc (OTCMKTS:MSRT) are what one might expect for a growing company in a business sector trying to find its footing. From FY2015 to FY2016 revenues increased over 225% – from $213,963 to $701,581. At the same time, operating expenses grew from $6.34 million to $14.3 million which resulted in a FY2016 operating loss of (-$13.6) million. In FY2015 MassRoots had a net loss of (-$8.5) million which grew to (-$18.03) million in FY2016. For FY2016 shareholders had a net loss of (-$0.34) per share.

Analysts who provide an opinion on the future of MassRoots Inc (OTCMKTS:MSRT) generally see the mass appeal of a growing market where some estimate that one in ten adults will use, by 2020, either cannabis or a related product. As it stands now, MassRoots appears to be the industry’s go-to social network and is leveraging their popularity with partnerships and other deals that include some of the industry’s largest, and best financed, brands. These partnerships may provide valuable, and unique, revenue streams from businesses in a fashion that was denied to many of the current social media giants as those platforms could not provide the same style of leverage as MassRoots can for the cannabis industry.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

BlackBerry Ltd (NASDAQ:BBRY), Freed Of Handsets, Looks To Software For Return To Glory

BlackBerry Ltd (NASDAQ:BBRY)

Despite freeing itself from the smartphone handsets that weighed on the company’s recent earnings, Canadian-based BlackBerry Ltd (NASDAQ:BBRY) is a having difficulty convincing investors and skeptics that it can redeem itself and return to profitability. The company plans a shift to the software business as the conduit to a return to its glory days.

The once mobile communication giant reported its fourth-quarter as well as full-year financial results last Friday and has no big gaps in its software offering after it integrated all its acquisitions. However, the company acknowledges that a lot of work has to be done to roll out these offerings in the automotive and healthcare sectors as well as other industries that they hope will drive its future growth.

According to Nicholas McQuire, a workplace IT specialist and analyst at CCS Insight, says BlackBerry has evolved over time and is very different from a decade ago. He adds that for the company to awaken its full potential and jump back to profitability, it needs to create awareness among enterprises that are not part of its core regulated business on the ‘new BlackBerry’.

As it stands, many current and potential investors are uncertain of the company’s real value and are eagerly waiting on John Chen, CEO, to issue guidance. The company is counting on a late bump in sales to reach a 30% growth target in software revenue for FY 2016.

According to Thomson Reuters data, BlackBerry has a 3.14 ratio in enterprise-value-to-forward-revenue which is well below Oracle and Microsoft’s 4.5 ratio. Oracle and Microsoft are among Blackberry’s main competitors in the enterprise software industry.

According to estimates by Thomson Reuters I/B/E/S, Blackberry, headquartered in Waterloo, Ontario, will have a hard time to break-even in its fourth quarter and may report below $1.4 billion in revenue in the financial year ended Feb. 28, 2017. BlackBerry Ltd (NASDAQ:BBRY)  used to rake in over $5.5 billion in quarterly earnings.

Blackberry, in a move to remain standing, is targeting the growing, but highly fragmented, market that connects sensors (as well as other devices). BlackBerry Ltd (NASDAQ:BBRY) has significantly invested in these potentially profitable areas including autonomous vehicles and cyber security. According to McQuire, the company is leaning in the right direction with big prospects ahead of it. He also acknowledges that these markets may take time to materialize.

Blackberry’s acquisition of WatchDox and Good Technology in 2015 helped it grab a leading position in the market of enterprise mobility in addition to the key role played by its QNX industrial operating system to drive the company’s dream in the autonomous vehicle sector. These sectors are filled by industry giants – hence presenting very tough competition. But according to Ali Mogharabi, an analyst at Morningstar, Blackberry is still unsure of how it will pick up and make progress in the autonomous driving sector.

Blackberry ceased making and selling smartphones inscribed with its brand after entering into a deal with TCL Communication, a Chinese smartphone maker, which will begin selling Blackberry branded smartphones in April.

The separation may be easy to execute given the fact that TCL will be depending on the BlackBerry brand to market its KeyOne device which was recently launched at a major technology conference.

Chen, who took over the company’s top position in 2013, says the company will need around four to five quarters to stem the steady decline in its revenue. He says revenue from the sale of software is projected to go down by around 15% in the financial year that started in March.

Mogharabi says it is difficult to figure out the company’s real position in their turnaround strategy as well as downside or upside in the future. He proposes that the company will try and standardize its guidance and provide more detailed information.

Ticker BBRY
Market Cap $4,155.32M
EPS (ttm) -$2.67
Shares Outstanding 536.17
Shares Float 530.23
Insider Ownership 11.20%
Float Short 10.13%
Short Ratio 15.64
Performance (Quarter) 11.51%
Performance (Year) 3.61%
Performance (YTD) 12.48%
Beta 1.11
Average Volume 3,433.54
Price $7.75
Volume 53,794,831
Target Price $7.92

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

GameStop Corp. (NYSE:GME) Admits Challenging Times

GameStop Corp. (NYSE:GME)

GameStop Corp. (NYSE:GME) released earnings for FY 2016 and provided guidance for 2017. GME shares dropped on the news. GME shares closed at $24.09 yesterday and are trading in the pre-market down over 11% at $21.30 on low volume. Short selling represents a large portion of the stock’s float – over 24%. When considering the number of shares held short and GME’s average daily volume, that calculates a short ratio of 9.05.

GME Financials

Q4 results provided short-sellers with justification. In the released report, video game demand was characterized GameStop Corp. (NYSE:GME) as “weak”. Total sales dropped 13.6%. Q4 comparable sale were down 20% in the USA and 16.3% overall. New hardware sales declined 29.1% and new software sales were down 19%. Sales of pre-owned games were also down 6.7%. This was not a total surprise to the market though. In January GameStop Corp. (NYSE:GME) provided guidance on holiday sales. In that guidance, GameStop stated that holiday sales were impacted by heavily discounted hardware pricing accompanied with heavy promotion by competing retailers.

2017 Guidance

GameStop Corp. (NYSE:GME) anticipates closing some stores but also opening others. Globally the company is estimating that it will open 35 new Collectible stores and 65 new Technology Brand stores. However, the company also estimates that it will reduce its global retail footprint by 2% – 3%. It expects capital expenditures in the neighborhood of $110 – $120 million in order to execute that plan.

The CFO of GameStop Corp. (NYSE:GME), Rob Llloyd, commented that in the future the company will no longer provide quarterly guidance for EPS or same store sales. Guidance will be restricted to annual guidance. He claims this approach is being adopted in order to focus the firm’s attention on long term goals rather than short-term results.

Excluding the Tech Brand stores, guidance for 2017 total sales is a gain of 2% to a drop of 2%. The company expects operating margins between 6.5% and 7.0%. For 2017, GameStop is expecting diluted EPS to come in between $3.10 and $3.40.

GME Share Performance

EPS for GameStop Corp. (NYSE:GME) has trended positively since 2013 when the company reported and EPS loss of -$2.13. That number went positive the next year and trended upwards and in 2016 the EPS was $3.80. Sales have stagnated though. In 2013 GameStop reported sales of $8.89 billion. By 2016 sales had improved to only $9.36 billion. Shareholders have benefitted from GME shares being bought back though. In 2012 139.9 million shares of GME were outstanding. That number shrank to 106 million by 2016.

GME shares have a 52-week high of $31.87 and a 52-week low of $19.50. Analysts have a broad range of opinion on GME shares. Six rate GME as a “strong Buy”, one rates the shares as a “Buy”, three rate the shares as a “Hold”, and one rates GME as a “Sell”.

In 2013, GME shares hit their highs near $50. That year the stock began that year trading around $20. 2013 was also the last year that these share prices have seen current levels.

3/24/2017
Ticker Symbol GME
Last Price a/o 8:39 AM EST  $                    21.30
Average Volume                2,660,000
Market Cap (mlns)  $              2,440.00
Sales (mlns) $9,090.00
Shares Outstanding (mlns) 101.88
Share Float (mlns) 99.29
Shortable Yes
Optionable Yes
Inside Ownership 2.20%
Short Float 24.23%
Short Interest Ratio 9.05
Quarterly Return -6.85%
YTD Return -3.68%
Year Return -16.54%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.